Economists are divided on whether the new year will bring rate hikes or a period of no change

ABC NEWS (Australia)

Economists are divided on whether the new year will bring rate hikes or a period of no change, but as Alan Kohler explains, the signs point to one thing.

Transcript

00:00As expected, the Reserve Bank kept interest rates where they were for the third month

00:06in a row.

00:07And that followed three cuts this year because inflation fell from 7.8% to 2.1%.

00:13And now it's rising again because demand is picking up, which was the intention after

00:17all.

00:18Now, the market and a lot of economists are predicting a rate hike next year, but that

00:23seems a stretch.

00:24Remember, the RBA only started lifting the interest rates in May 2022 because the March

00:29Quarter inflation rate that year, released a few days earlier, was 5.1%.

00:36Now the latest number we've had this time is 3.8%.

00:39For a rate hike next year, it would need to be either 5% again next year, or obviously

00:45heading there.

00:47And we're a long way from that.

00:49More likely, we've got 12 months or more of interest rates right where they are now.

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